Small Business Rental Tax Rates

Issue

To encourage small businesses to invest in residential real estate and to increase the available housing supply in Canada, income earned by a Canadian-Controlled Private Corporation (CPCC) for rental income should be taxed at the active business rate instead of the high investment tax rate.

Background

The federal government is encouraging large multinational corporations to build housing units and to supply inventory for the rental market. Grants which are available to large organizations are not available to smaller companies. Businesses wanting to invest in their local economies and to support housing needs are de-incentivized from building affordable housing options for Albertans.

Recommendations

The Alberta Chambers of Commerce recommends the Government of Alberta:

1. Work with other provincial governments to remove tax penalties faced by small businesses entering the rental market by allowing some portion of the rental income generated at a passive rate to support community investment efforts by small businesses and to help alleviate the housing crisis in Alberta.